Greece wants to renegotiate policies, not targets - PM

By Dina Kyriakidou and George Georgiopoulos

ATHENS | Fri Jul 6, 2012 8:03pm BST

(Reuters) - Greece will meet targets set by international lenders, but needs more time and wants to renegotiate policies that make its fiscal situation worse by preventing a return to economic growth, Prime Minister Antonis Samaras said on Friday.
In his first policy speech since taking office, Samaras outlined his government's priorities before a confidence vote on Sunday. Samaras said his aim was not to demand a change of the goals set in the 130 billion euro bailout deal keeping Greece afloat, but in the austerity policies imposed to meet them.
"We don't want to change the targets," Samaras told parliament. "What needs to change is that which is hampering us from attaining the targets. We want to fight the recession."
The ruling coalition of Samaras' centre-right New Democracy party and two centre-left groups which emerged after June 17 elections wants to change austerity measures that have hit the poor hardest and stifled an economy shrinking for a fifth year.
Samaras, who was laid low by eye surgery days after being named prime minister, conceded that Greece had missed targets included in its bailout programme but promised to do everything to keep the country in the euro.
He outlined an agenda of growth-boosting measures - ranging from speeding up privatisations to tax reform and battling bureaucracy to making the country investment-friendly.
But he lashed out at euro zone partners who have openly said Greece risks leaving the euro if it fails to keep its pledges, saying it was difficult to move ahead with privatisations while foreign leaders publicly discuss such options.
"We can't have foreign officials speaking publicly about Greece returning to the drachma," he said. "They can't undermine what we are trying to achieve.... This must stop."
Greece, which is due to run out of cash in weeks without support from the troika of EU, International Monetary Fund and European Central Bank lenders, has fallen behind agreed targets partly due to a two-month political limbo of repeat elections.
It was due to come up with an additional 11.7 billion euros of cuts in June to merit the next loan instalment.
NEED MORE TIME
Samaras said it was clear fiscal adjustment would take more than two years, as initially agreed with lenders, repeating a pre-election call to lessen the pain of austerity by getting the troika to extend the period to four years.
"The adjustment must not take place over two years, but longer. And the programme misses its targets because of the recession, this is no reason to take more fiscal measures as we have done so far. Recession must be stopped, not continuously deepen," he said.
"With this uncontrolled recession, the programme's funding needs are rising. We want this to stop and to start getting out of this dead end," he said. "This is the subject of our 'renegotiation'."
European leaders have made clear there is little room to manoeuvre and Greece must catch up with lost time on its commitments if it is to receive any more cash. A total of 240 billion euros have been pledged to Greece so far in a rescue effort aimed at stopping its debt crisis from spreading to the rest of the euro zone.
Samaras' conservative government has stumbled off to a rocky start, with its initial pick for finance minister resigning over health problems and the prime minister himself unable to travel to an EU summit because of his eye surgery.
On Thursday he met top officials from the troika, on their first meet-and-greet visit since the new government emerged. Government officials said the talks focused on where Greece had fallen behind and what areas needed quick implementation.
Finance Minister Yannis Stournaras, who also met the troika, said the officials told him he faced a tough time at a meeting with euro zone counterparts on Monday.
Government officials said the top priority was to convince partners Greece now had a government that was determined to take on the huge task, regain credibility and then start discussing changing parts of the deal.
Opposition parties criticised the government for not pushing for an immediate renegotiation of the bailout.
"They promised the Greek people a renegotiation but they are promoting a tough implementation of the bailout instead," the main opposition radical leftist Syriza party's spokesman Dimitris Papadimoulis said in a statement.
(Writing by Dina Kyriakidou; Editing by Peter Graff)